Money & Happiness

Effective leaders are positive, happy people, but happiness is a squishy and illusive term. To really understand it we have to differentiate between our day-to-day contentment and our life fulfillment. These are two different kinds of happy.

Day-to-day contentment comes from peace of mind and emotional well-being that is the result of a lack of worry. That is why psychologists argue that beyond a certain income level, money can’t buy happiness. Once we have covered our basic needs and are no longer living in a state of deprivation, then more money doesn’t make us any more content. Money has declining marginal utility.

More money can, however, bring you a more satisfying and fulfilling life if you spend it wisely. This is based on our relative life assessment. If we spend the extra income on experiences, education, and philanthropy, we can increase the sense that we are living a meaningful life and money can buy us this.

But beware, money is a tool. More of it won’t make you more content, but it can lead to a greater sense of fulfillment & the relative satisfaction of living well.